Extract from the ACE Briefing Note – 19th August 2005 “Update on the Freedom of Information Act 2000”
On 19 August 2005 the Association for Consultancy and Engineering produced an update on their earlier Briefing Note on the Freedom of Information Act 2000 (“the Act”) which explained the key features of the Act, what the Act would mean for consultants and the exemptions that are likely to be the most relevant. It indicated how the Act has been (and could be) used by businesses, particularly competitors, and alerted consultants on steps they should consider taking in order to reduce the likelihood of their commercially sensitive and/ or confidential information being disclosed to competitors.
By the way of a brief reminder the act came into force on 1 January 2005 and provides a general right of access to anyone, anywhere in the world, to request information held by or on behalf of any Public Authority (“PA”), in the UK. The Act is retrospective, so allows access to information regardless of when that information was created or how long it has been held by the public authority. The Act applies in England , Wales and Northern Ireland . The Scottish equivalent is the Freedom of Information (Scotland Act) 2002, which is similar, although not identical, to the Act.
Use of the Act by business
Although it is still early in terms of trying to predict just how the Act will be used, the US experience has shown that the biggest users are other businesses. It is common for a company tendering for a US government contract to try and use the US equivalent of the Act to gather information held on its competitors.
ACE is aware of the least one instance when a member was advised by the PA of a request (which has been made by another member company) for disclosure of its tender documentation. The matter was satisfactorily resolved and disclosure was prevented but the incident necessitated much involvement of senior management time. If this practice were to become prevalent, the amount of lost management time in challenging such requests may well have an adverse effect on productivity in the industry as a whole, not to mention on the culture of co-operation and integration which the industry is being encouraged to foster. Those seeking information might, in another circumstance, find themselves recipients of similar request under the Act!
Steps to Protect your Business
The right to request information held by a PA is subject to many exemptions, the most relevant of which to private sector businesses are (a) an absolute exemption if the requested information was provided to the PA in confidence or (b) a qualified exemption for any commercially sensitive information and trade secrets, or where disclosure would prejudice the commercial interests of any party. There is further information at the end of this briefing note on the ‘commercial interests’ exemptions. However, here are a few suggested steps that you could take in order to protect your business when dealing with PAs:
- If you regularly work with a PA, it is important for you find out how that particular PA intends to handle freedom of information requests. There is a ‘good practice’ recommendation that government bodies should notify businesses about requests to examine their documentation but there is no obligation in the Act for a business to be consulted before the information is disclosed.
- As the PAs are not able to contract out of the obligation under the Act by agreeing overly restrictive confidentiality provisions, you should consider strengthening your contracts with PAs e.g. by adding a contractual requirement for the PA to consult with you, or at least notify you, if a third party makes a request under the Act for disclosure of information relating to your business: obliging the PA to consult with you whether the public interest test is balanced in favour of disclosure or whether disclosure would amount to substantial prejudice.
- Where possible, you should build in safeguards, e.g. qualifying your tender documentation by stipulating what your company considers is commercially sensitive information that should be disclosed and identifying any trade secrets. Where possible, you should get the PA to acknowledge this in writing.
- A good practice to adopt is to mark all correspondence and other information supplied to a PA as “Commercial In-Confidence”, or some other type of confidentiality notice. However the marking of the information and correspondence as “Commercial In-Confidence” will by no means guarantee its exemption from disclosure. Whether or not an obligation of confidence has arisen is essentially a legal question.
- You should ensure that employees who negotiate and deal with tenders and contracts with PAs understand how the Act may apply.
Challenging a request for disclosure
Anecdotal evidence suggested that, if you are consulted by a PA regarding a request for disclosure of your confidential or commercially sensitive information, you are advised to give the PA as much information as possible as to why the request should be denied. This may sound obvious but it is important not to see the PA in question as an enemy. The person dealing with the request on the PAs side may be inexperienced and possibly inundated with requests for information under the Act from all sorts of sources! You will greatly assist your case if you can provide the PA with a carefully crafted letter, setting out all possible exemptions that may apply to your information, quoting the relevant sections of the Act and/or referring to any contractual provisions or correspondence.
Clarification of the “commercial interest” exemption
The Information Commissioner (“Commissioner”) has recently considered the prejudice to commercial interests” exemption and decided that disclosure of the price of a work of art paid by a PA to an artist would prejudice the commercial interested of the PA as well as the artist.
The brief facts of the case were as follows. In January 2005 a request was submitted to a PA, by the National Maritime Museum , for the disclosure under the Act, for documents and correspondence relating to payments made by the PA to an artist in respect of the work in an exhibition that the PA was staging. The PA refused to disclose the requested information and a complaint was made to the Commissioner, who decided that the commercial interests exemption would apply to this information and applied the public interest test (i.e. whether it should nonetheless be disclosed in the public’s interest).
The Commissioner’s view was: “Those who engage in commercial activity with the public sector must expect there may be a greater degree of openness about the details of those activities than had previously been the case prior to the Act coming into force.“
But in certain circumstances the Commissioner acknowledged this may prejudice the individual artist and that there was a public interest in encouraging new artists and entrepreneurs to flourish. It was further recognised that the PA would be playing a crucial role by exhibiting the artists work. The Commissioner also recognised there would be prejudice to the artist in relation to his next sale or commission had the information been disclosed under the Act. Interestingly, when analysing the public interest test in relation to this prejudice, the Commissioner decided that the prejudice to the artist’s commercial interests was not in itself a sufficient reason to maintain the exemption in his individual case.
This note has been produced with the assistance of ACE (Association for Consultancy and Engineering) using an extract taken from its Briefing Note on this topic as referred to above.
The full briefing note can be found on the ACE website (http://www.acenet.co.uk/documents/FoI%20Act.pdf )